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Push for Crypto Mining Continues Despite China Crackdown

Amid Chinese authorities’ recent change of attitude to crypto mining activities in China, internet company The9 says it has now finalised work with Montcrypto on an agreement to build a carbon-neutral mine with a 20MW power infrastructure in Alberta, Canada.

The idea of a 20MW power capacity meant to serve more than 6,000 Antminer S19j machines is to provide a greener incentive for the Chinese company’s digital currency mining operations even as Beijing renewed its call for a crackdown on Bitcoin mining on Friday May 21. The9 also invested in another cryptocurrency mining facilities company in Manitoba, Skychain, with a plan to expand the capacity from 20MW to 32MW. According to a company statement, the move will help reduce natural gas emissions by about 53 mln cubic meters per year and reduce greenhouse gas emissions by 128,000 tons of Co2 equivalent.

Relatedly, an emerging mining machine manufacturer in China, Goldshell, launched four new home-use mining machines which do not need to be connected to a computer but only need a network cable and power supply to mine independently. The brand’s graphical user interface comes with a PC-side software developed specifically for its mini-series miners. 

These form part of the latest efforts in the crypto mining industry to uphold the activities of miners who continue to play a pivotal role in the success of the ecosystem. The Chinese government’s call led, for example, the Inner Mongolia region – which accounts for about 8% of monthly Bitcoin mining processing power in China – to issue a 8-point measure to combat cryptocurrency mining within its jurisdiction.

Energy regulators in China’s Sichuan province sought to follow Inner Mongolia’s footsteps as an  official at the Sichuan Energy Regulatory Office of National Energy Administration hinted that the region will meet local power companies to gather information on cryptocurrency mining. 

The developments put a cloud on China’s significant role in the global crypto and mining space, especially the possible shift it will create in moving the high concentration of Bitcoin mining hash power away from the country. Renewed discussions about crypto mining in general were also strengthened with some suggesting there’s a pending migration of mining activities from China to parts of Europe and North America while others think moving away from fossil-fuel energy would be ideal. 

One of the industry players to speak up is the Nasdaq-listed Canaan Inc which recently reported an improved financial performance for Q1. The mining equipment maker says crypto mining activities using clean energy should be spared the crackdown since the business helps make better use of electricity and contributes to employment and the local economy. 

In their earnings conference call following the company’s post of an increased gross profit of RMB194.2 mln (US$29.6 mln( from RMB2.4 mln in the same period of 2020 (after reporting a nearly 500% surge in Q1 sales to RMB402.8 mln ($63.12 mln)), Canaan’s CEO, Zhang Nangeng, said that Beijing’s crackdown is prompting some miners to “undersell” mining equipment thus helping create knock-down prices. 

“Just as it took a long time for Bitcoin to be recognised by the market, there will also be a (long) process for Bitcoin, and crypto mining, to be recognised by regulators” in China, Zhang said.

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